Insmed Incorporated (NASDAQ: INSM), a biopharmaceutical company
focused on developing and commercializing an inhaled anti-infective
to treat patients battling serious lung diseases that are often
life-threatening, reported financial results for the three and six
months ended June 30, 2013.
Highlights of the second quarter of 2013 and recent weeks
include:
- Achieved the Primary Endpoint in a Registrational Phase 3
Clinical Trial of ARIKACE® to treat Cystic Fibrosis (CF) Patients
with Pseudomonas aeruginosa infections (Pa). The European and
Canadian Phase 3 clinical trial of once-daily ARIKACE (liposomal
amikacin for inhalation) achieved its primary endpoint of
non-inferiority to twice-daily TOBI® (tobramycin inhalation
solution) for relative change in forced expiratory volume in one
second (FEV1) from baseline to end of study. Secondary endpoints
showed comparability of once-daily ARIKACE compared with
twice-daily TOBI consistent with the primary endpoint of the
study.
- Granted Qualified Infectious Disease Product (QIDP) and Fast
Track Designations for ARIKACE in Nontuberculous Mycobacteria (NTM)
Lung Infections. The U.S. Food and Drug Administration (FDA)
granted ARIKACE QIDP and Fast Track designations for the treatment
of NTM.
- Completed an Underwritten Public Offering. Insmed completed an
underwritten public offering of 6.9 million shares of common stock,
which reflects the underwriters' exercise in full of their
over-allotment option of 900,000 shares, which provided net
proceeds to the Company of approximately $67.0 million.
- Received Notice of Allowance for Key European
Composition-of-Matter Patent for ARIKACE. The European Patent
Office notified Insmed that it intends to grant a key European
composition of matter patent for ARIKACE. Once granted, the patent
will provide protection for novel anti-infective formulations
comprising an aminoglycoside and Insmed's liposomal delivery
technology, and methods for making the formulations. Amikacin is
one of the aminoglycosides covered by the patent. The patent also
includes claims relating to the use of the aminoglycoside/lipid
formulations for treating pulmonary infections, including those
caused by Pa and certain mycobacterial infections, among
others.
- Appointed Christine Pellizzari as General Counsel and
Secretary. In July, Ms. Pellizzari joined Insmed with nearly 20
years of experience at development- and commercial-stage
biopharmaceutical companies, including senior-level legal and
strategic leadership roles at Aegerion Pharmaceuticals and
Dendrite, Inc.
"Throughout the second quarter and in recent weeks we made
significant progress in a number of areas critical to our goal of
becoming a patient-centric biopharmaceutical company. We reported
positive clinical data and regulatory developments, fortified our
patent portfolio, enhanced our management team and strengthened our
balance sheet. We are focused on preparing our regulatory filing
for ARIKACE in Europe and Canada to treat Pseudomonas aeruginosa
infections in patients with CF, and pursuing a dialogue with the
FDA regarding the U.S. regulatory pathway for ARIKACE to treat
NTM," said Will Lewis, President and Chief Executive Officer of
Insmed.
"With positive Phase 3 data for our CF indication and our QIDP
and Fast Track designations for our NTM indication, we are actively
moving forward with our strategy to bring once-daily ARIKACE to
patients suffering from these orphan lung diseases in two
indications in two geographies in two years," concluded Mr.
Lewis.
Second Quarter Financial Results
For the second quarter of 2013, Insmed reported a net loss of
$8.9 million, or $0.28 per share, compared with a net loss of $9.7
million, or $0.39 per share, for the second quarter of 2012. The
decrease in net loss is primarily due to $11.5 million in revenue
recorded during the second quarter of 2013 that related to a
one-time payment for the sale of the Company's right to receive
future royalties under its license agreement with Premacure AB (now
Shire plc). This one-time revenue was partially offset by higher
research and development and general and administrative
expenses.
Research and development expenses in the second quarter of 2013
increased to $12.2 million from $7.7 million in the second quarter
of 2012, primarily due to higher costs for clinical trial
activities associated with the Company's Phase 3 clinical trial and
two-year open-label extension study in CF patients with pseudomonas
lung infections in Europe and Canada, and its Phase 2 clinical
trial in patients with NTM lung infections in the United
States.
General and administrative expenses for the second quarter of
2013 increased to $7.5 million from $2.2 million in the second
quarter of 2012. The increase was primarily due to higher
compensation expense, which included $2.6 million in non-cash
stock-based compensation expense, and $1.0 million in market
research and other related costs.
Balance Sheet Highlights and Cash
Guidance
As of June 30, 2013, Insmed had cash, cash equivalents and a
certificate of deposit totaling $76.8 million, compared with $92.9
million as of December 31, 2012. Excluding the one-time payment of
$11.5 million from Shire, the Company utilized $27.8 million of
cash to fund operations in the first six months of 2013. As of June
30, 2013, working capital was $58.3 million, excluding a $2.2
million certificate of deposit.
On July 22, 2013, Insmed completed an underwritten public
offering of 6,900,000 shares of the Company's common stock,
including the underwriters' exercise in full of their
over-allotment option of 900,000 shares, which generated $67.0
million of net proceeds to the Company.
The Company plans to fund further clinical development of
ARIKACE, invest in third party manufacturing capacity and fund its
efforts to obtain regulatory approvals. As a result, the Company
estimates that its cash requirements to fund operations in second
half of 2013 will be in the range of $28 million to $33 million.
The Company believes that its cash balance of $76.8 million as of
June 30, 2013, plus the proceeds from its recently completed public
offering, will be sufficient to fund its operations through
2014.
Conference Call
Insmed management will host an investment community conference
call to discuss these results and answer questions today beginning
at 8:30 a.m. Eastern time. Shareholders and other interested
parties may participate in the call by dialing 888-803-5993
(domestic) or 706-634-5454 (international) and referencing
conference ID number 25882867. The call will also be broadcast live
on the Company's website at www.insmed.com.
A replay of the conference call will be accessible two hours
after its completion through August 12, 2013, by dialing
855-859-2056 (domestic) or 404-537-3406 (international) and
referencing conference ID number 25882867. The call will also be
archived for 90 days on the Company's website at
www.insmed.com.
About Insmed
Insmed Incorporated is a biopharmaceutical company dedicated to
improving the lives of patients battling serious lung diseases.
Insmed is focused on the development and commercialization of
ARIKACE®, or liposomal amikacin for inhalation, for at least two
identified orphan patient populations: cystic fibrosis (CF)
patients with Pseudomonas aeruginosa lung infections and patients
with non-tuberculous mycobacteria (NTM) lung infections. For more
information, visit www.insmed.com.
Forward-looking Statements
This release contains forward-looking statements. Words, and
variations of words, such as "intend," "expect," "will,"
"anticipate," "believe," "continue," "propose" and similar
expressions are intended to identify forward-looking statements.
Investors are cautioned that such statements in this release,
including statements relating to the status, results and timing of
clinical trials and clinical data, the anticipated benefits of
Insmed's products, the anticipated timing of regulatory
submissions, and the ability to obtain required regulatory
approvals, bring products to market and successfully commercialize
products and Insmed's cash needs constitute forward-looking
statements that involve risks and uncertainties that could cause
actual results to differ materially from those in the
forward-looking statements. Such risks and uncertainties include,
without limitation, failure or delay of European, Canadian, U.S.
Food and Drug Administration and other regulatory reviews and
approvals, competitive developments affecting the Company's product
candidates, delays in product development or clinical trials or
other studies, patent disputes and other intellectual property
developments relating to the Company's product candidates,
unexpected regulatory actions, delays or requests, the failure of
clinical trials or other studies or results of clinical trials or
other studies that do not meet expectations, the fact that
subsequent analyses of clinical trial or study data may lead to
different (including less favorable) interpretations of trial or
study results or may identify important implications of a trial or
study that are not reflected in Company's prior disclosures, and
the fact that trial or study results or subsequent analyses may be
subject to differing interpretations by regulatory agencies, the
inability to successfully develop the Company's product candidates
or receive necessary regulatory approvals, inability to make
product candidates commercially successful, changes in anticipated
expenses, changes in the Company's financing requirements or
ability raise additional capital, and other risks and challenges
detailed in the Company's filings with the U.S. Securities and
Exchange Commission, including its Annual Report on Form 10-K for
the year ended December 31, 2012 and subsequent filings. Investors
are cautioned not to place undue reliance on any forward-looking
statements that speak only as of the date of this news release. The
Company undertakes no obligation to update these forward-looking
statements to reflect events or circumstances or changes in its
expectations.
-Tables to Follow-
INSMED INCORPORATED
Consolidated Balance Sheets
(in thousands, except par value, share and per share data)
June 30, 2013 December 31, 2012
----------------- -----------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 74,588 $ 90,782
Certificate of deposit 2,195 2,153
Prepaid expenses and other current
assets 1,783 643
----------------- -----------------
Total current assets 78,566 93,578
In-process research and development 58,200 58,200
Other assets 104 117
Fixed assets, net 1,855 1,666
----------------- -----------------
Total assets $ 138,725 $ 153,561
================= =================
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 7,865 $ 7,060
Accrued expenses 3,188 2,933
Accrued compensation 1,889 2,207
Accrued lease expense, current 301 295
Deferred rent 139 149
Capital lease obligations, current 69 96
Current portion of long term debt 4,650 3,007
----------------- -----------------
Total current liabilities 18,101 15,747
Accrued lease expense, long-term 514 647
Capital lease obligations, long-term 32 64
Debt, long-term 14,894 16,221
----------------- -----------------
Total liabilities 33,541 32,679
----------------- -----------------
Shareholders' equity:
Common stock, $0.01 par value;
500,000,000 authorized shares,
31,999,760 and 31,488,204 issued and
outstanding shares at June 30, 2013
and December 31, 2012, respectively 320 315
Additional paid-in capital 462,944 455,325
Warrant to purchase common stock - 790
Accumulated deficit (358,080) (335,548)
----------------- -----------------
Total shareholders' equity 105,184 120,882
----------------- -----------------
Total liabilities and
shareholders' equity $ 138,725 $ 153,561
================= =================
INSMED INCORPORATED
Consolidated Statements of Comprehensive Loss
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
--------- --------- --------- ---------
Other revenue $ 11,500 $ - $ 11,500 $ -
--------- --------- --------- ---------
Operating expenses:
Research and development 12,225 7,745 22,559 12,484
General and administrative 7,544 2,238 11,520 4,763
--------- --------- --------- ---------
Total operating expenses 19,769 9,983 34,079 17,247
--------- --------- --------- ---------
Operating loss (8,269) (9,983) (22,579) (17,247)
Investment income 50 290 101 708
Interest expense (635) (1) (1,277) (3)
Gain on sale of assets, net - - 2 5
--------- --------- --------- ---------
Loss before income taxes (8,854) (9,694) (23,753) (16,537)
Provision (benefit) for income
taxes - 2 (1,221) 4
--------- --------- --------- ---------
Net loss $ (8,854) $ (9,696) $ (22,532) $ (16,541)
========= ========= ========= =========
Basic and diluted net loss per
share $ (0.28) $ (0.39) $ (0.71) $ (0.67)
========= ========= ========= =========
Weighted average basic and
diluted common shares
outstanding 31,754 24,875 31,654 24,867
========= ========= ========= =========
Net loss $ (8,854) $ (9,696) $ (22,532) $ (16,541)
Comprehensive loss:
Unrealized (loss) gain on
short-term investments, net
of taxes - (30) - 186
--------- --------- --------- ---------
Comprehensive loss $ (8,854) $ (9,726) $ (22,532) $ (16,355)
========= ========= ========= =========
Contacts: LHA Anne Marie Fields Senior Vice President
212-838-3777 afields@lhai.com Bruce Voss Managing Director
310-691-7100 bvoss@lhai.com
Insmed (NASDAQ:INSM)
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